9 Questions for Ashley Madison's Founder

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

Here's an entrepreneurial challenge for you: Build a business and a brand based on a service that many people would reject as "wrong"--at least publicly.

And just to make it tougher, do it without most of the traditional advertising vehicles--because they won't come anywhere near your brand.

Here's another in my series where I pick a topic, connect with someone smarter than me, and we discuss. (There's a list of previous installments at the end of the article.)

This time I talked to Noel Biderman, former sports attorney and current president of AshleyMadison.com and Avid Life Media. Ashley Madison, which has 15 million members in 25 countries, bills itself as the "most successful website for finding affairs and cheating partners." (There is no "Ashley Madison," by the way. Those were two popular female names when the site was created.)

I would have no idea how to start a business like Ashley Madison.It might sound counterintuitive, but we had to start by building a brand with incredible credibility. Keep in mind that even though online dating has gained broad acceptance, early on it wasn't exactly something people embraced. The predecessor to online dating was newspaper classified ads, the bastion of last resort. When your predecessor was the bastion of last resort you desperately need credibility.

Interpersonal relationships are incredibly important, so you won't use a service unless you have faith in the brand.

Out of all the online dating services, the ones that have survived--like Match and eHarmony--built a brand. If we were just a service we wouldn't have that credibility.

So how does a business like yours get credibility?We can't create consumption like most businesses. We can't convince people to have an affair. We don't try.

But we can provide a credible, confidential avenue for people who want to have an affair. Think about it: The traditional ways people went about having affairs were definitely not effective. They were having affairs in the workplace. Or they were having affairs within their circle of friends. Think about how well those tend to work out.

So our mission was to say that if you're thinking about having an affair you're not alone. It's part of the human condition. We'll help you meet someone and not get caught. If you want to be clandestine, we're an intelligent choice.

How did you figure out who to target?I decided Ashley Madison needed to be a female-centered brand. I looked at a ton of research and frankly threw most of it out the window, but what I did find is that when women entered the workplace the dynamic started to change. More women had jobs, became more financially independent, traveled more, and interacted with more people. When the obstacles were removed, they started behaving like men.

I was willing to bet that the Internet was the next big jump for women. So I had to convince them that finding and meeting people online was better than finding them in the workplace--and once I did, I knew the men would follow.

There's a reason clubs have ladies' nights: Attract women, and men will follow.

How did you get your message out? You couldn't exactly go to The New York Times or NBC.It's funny. If mainstream media gets into the judgment business, what do you do?

Our acceptance has ebbed and flowed: In 2008, NBC let me run a Super Bowl ad and we were able to advertise in other, more "mainstream" outlets. But when the economy improved and the economics allowed it, conservatism and judgment came roaring back in.

So that's why you've offered $25 million to buy the naming rights to the New York Jets' and Giants' Meadowlands stadium, and sponsored Howard Stern's Tiger Woods Mistress Beauty Pageant?I decided that if there were going to be artificial obstacles, then everything is fair game.

We met with advertising agencies early on and were totally underwhelmed by their lack of knowledge on the topic. So from Day 30 we decided to do all of our marketing in-house: Every ad, every commercial, everything you see and hear is generated in-house. We spend as much time crafting messages as we do crafting the website.

Why don't we outsource our marketing? We understand the psychographics of our customers better than anyone. And we can respond much more quickly: The day Korean dictator Kim Jong Un's marriage was made public we had a billboard up in Los Angeles.

You have tons of anonymous data. What would surprise me?Our busiest days are the days after Valentine's Day, Mother's Day, and Father's Day.Those are holidays that come with an expectation of intimacy. If that expectation is not met...

Our data shows that Monday is our busiest day of the week. Weekends are full of expectations of intimacy and, again, when that expectation isn't met... Members often log in even before they go to work, so that's why we advertise on Howard Stern during drive time.

Early on we advertised on Friday and Saturday nights. Makes sense, right? That advertising failed miserably. Over time we've come to know the needs and behavior patterns of our users better than anyone.

You sometimes take hits for your approach to marketing, though.We've always said we're going to be unabashed. I don't need to hide. I don't need protection. I'm happy to appear on Sean Hannity's show and have him scream about how immoral he thinks I am because I know our servers are humming and we can barely handle the page views because all his viewers are running to my site.

You're married, so a question you're often asked is, "But Noel, how would you feel if you found out your wife was on Ashley Madison?"It's funny you bring that up. When I've been asked that question, I reply, "I would be devastated..." but the rest of my answer has been cut.

My complete answer was, "I would be devastated, but I wouldn't blame a website or an inanimate object." Reporters were trying to do their thing, so I stopped worrying about it. I'm comfortable raising my own family with this business as a backdrop.

Say I'm a small business owner. I don't have a lot of money and resources for marketing and advertising. What tips can you give me?Here are a few:

I wasn't a marketer. I was a sports attorney and then COO of a public company. Understand your metrics, understand your customers, and be confident you can craft the best message for them. Trust your own vision and voice and you will be pleasantly surprised by the outcome.

If you're Apple it might make sense to hire an outside agency. If you're a small business, going outside is a horribly bad choice. Memorable marketing has been created by small businesses willing to follow their own vision. You'll get a 3x return on your vision versus the 1x return you'll get if you outsource.

2. Don't leave the marketing line on your business plan blank.

I see a lot of business plans. I always drop down to the marketing line first and often all I see are zeros.

Organic businesses are few and far between. You must have a real plan for how you can acquire customers. When you can define it you can control your own destiny.

Before you do anything else, figure out how you will acquire customers.

3. Don't be afraid to be controversial.

You don't always have to be positive. You don't have to be everything to everyone. People are smart. They're well informed. They can draw their own conclusions. Don't be afraid to take a position you believe in.

4. Don't be afraid to start a conversation.

I decided we would become a sociology experiment. We realized we have so much anonymous data and we could go through our data to show the true reasons men and women have affairs, what their demographics are, whether there really is a two-year itch or a seven-year-itch.

Infidelity is an incredibly popular topic. That's why paparazzi follow stars around. I realized I could be a gatekeeper of incredible sociology data.

Lots of people were happy to be against infidelity, but no one was willing and able to be a voice that tries to understand it. I thought it could be an intelligent conversation.

Pick a topic, start an intelligent conversation, and keep building your brand. People may not be ready for what you offer today. But when they finally are, it's important for your brand to be front and center.